Eurozone GDP edges higher in first quarter

Eurozone economic growth ticked higher in the first quarter of 2024, official data showed on Wednesday.

According to flash estimates from Eurostat, the official statistics office of the European Union, seasonally-adjusted GDP increased by 0.3% in both the Eurozone and wider bloc.

That compares to a 0.1% decline in the previous quarter in the Eurozone.

Year-on-year, GDP rose by 0.4% in both regions.

Among individual countries, Germany saw GDP tick up by 0.2%, Spain by 0.7%, France by 0.2% and Italy by 0.3% quarter-on-quarter.

The update coincided with improving industrial production and employment data, also released by Eurostat on Wednesday.

The number of employed persons increased by 0.3% in the Eurozone, and by 0.2% in the EU in the first quarter, while industrial production in March was marginally better-than-expected.

It increased by 0.6% across single currency states, ahead of the 0.5% analysts had forecast, and by 0.2% in the wider EU.

Year-on-year industrial production was down 1.0% in both blocs, less than the 1.2% expected.

The biggest increase in industrial production was in capital goods, up 1%.

The data received a boost from Ireland, which saw industrial production surge 12.8%. However, Irish data is known to be extremely volatile.

In contrast, Germany and France – the Eurozone’s two largest economies – saw industrial production fall 0.7% and 0.3% respectively.

Bert Colijn, senior economist, Eurozone, at ING, said: “Production seems to be tentatively bottoming out at the moment, with a modest recovery expected in the second half of the year.

“Consumer spending shout get a boost from higher real wage growth, with the goods cycle starting to turn.”

Joshua Mahony, chief market analyst at Scope Markets, said: “With the Eurozone economy clearly showing tentative signs of resurgent strength, today’s comments from European Central Bank [economist] Georg Muller, that a June cut is very likely, provides a welcome scenario where we could see them easing rates as the economy takes on an upwards trajectory.”